The Internal Revenue Service just announced it will no longer make certain information available to banks, which will make it riskier for them to make fund anticipation loans.

These are short-term loans that allow someone to get an advance on their tax refund. The fees are high and consumer advocates have fought long and hard against RALs.

The IRS says it will stop making the debt indicator available during next year’s filing season.

“We no longer see a need for the debt indicator in a world where we can process a tax return and deliver a refund in 10 days,” IRS Commissioner Doug Shulman said in a statement.

“Refund Anticipation Loans are often targeted at lower-income taxpayers,” he added. “With e-file and direct deposit, these taxpayers now have other ways to quickly access their cash.”

Liberty Tax Service CEO and Founder John Hewitt reacted strongly to the IRS announcement today that the debt indicator will be discontinued.

"It's a disappointing decision for consumers. The demand for Refund Anticipation Loans is customer-driven. We are emerging from the greatest financial downturn since the Great Depression. This really isn't the time to take financial options away from those who choose them, and more importantly need them ," said Hewitt from his corporate headquarters in Virginia Beach, Virginia.

Who wins, here?

Want More? Get My Free VIP Franchise Newsletter

Join 6,000 Other Well-Informed Newsletter Subscribers

Thank you for subscribing!

Something went wrong.

You'll also receive updates from The Franchise King Blog

About The Franchise King®

The Franchise King®, Joel Libava, is the author of several books on franchise ownership. He specializes in teaching would-be franchise owners how to choose, research and buy a profitable franchise.

Reader Interactions

Comments

Joel is Liberty Tax involved with offering customers these ‘Refund Anticipation Loans’? I was unaware such loans exsisted and in my eyes I agree with Doug Shulman because it seems like these types of ‘cash advances’ could be very predatory to lower income tax payers.

I hear you loud and clear Joel and on the other hand to play ‘Devil’s advocate’ for H&R Block and Liberty Tax some of these people in need of a ‘Refund Anticipation Loan’ may need the money today. Who am I, or Mr. Shulman for that matter, to say these people should wait 10 days for their tax refund. Maybe rent is due in 2 days or maybe the refridgerator is empty.

Ok David, Another devil’s advocate position; Aren’t we enabling these folks? Are we not keeping them in “the cycle?” What did folks do back in the day? When these “loans’ were not available? The Franchise King®

There are times when we feel as though there is simply no way out of the mess that we happen to find ourselves in at the moment. Take tax related matters as a prime example. But if that is the case. Tax return

Primary Sidebar

I’m The Franchise King®, Joel Libava. If you’re interested in finding out all you can about choosing, researching and buying a money-making franchise, safely, I can help.I’ll teach you how to dramatically increase your odds of success, so you can take control of your future and live the life you’ve always dreamed of.Start Here

New Franchise Research Guide Available! “Yes, highly recommended…The Franchise King, Joel Libava, is the expert. The cost of this guide is a pittance compared to what you risk with taking on a franchised business.” – Tim Berry, Co-Founder, Palo Alto Software

Franchise Tools And More

Join 30,000 Others Who Follow The Franchise King® – Joel Libava

Joel @ the franchiseking dot com – 216-831-2610 Cleveland, Ohio

Disclosure: This website uses affiliate programs for monetization, which means when you click on links on this site-including links contained in Sponsored Posts that go to various websites and make a purchase, it may result in a commission that is credited here. Privacy Policy · Terms of Service · Sitemap · Faq's · Contact Me

Copyright The Franchise King® All rights reserved.

Take My Free Franchise Quiz

See If You Are Right For a Franchise Business

A link to your franchise quiz is on the way

Something went wrong.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we'll assume that you are happy with it.OkNoPrivacy policy